PVP Ventures Ltd said Thursday it has agreed to acquire a majority stake in dialysis services provider 7 Med India Pvt. Ltd and Epitome Group of kidney-care hospitals.
Mumbai-listed PVP will initially acquire a 41.23% stake in 7Med and will gain majority shareholding within 12 months for a total of Rs 127 crore, comprising primary capital infusion and secondary stake purchases.
The company will eventually increase its stake to 76% over time, it said in a statement. The subsequent investments are subject to achievement of financial benchmarks contractually laid out over the next few years, PVP said.
PVP Ventures is building a house of brands in the healthcare services sector. The company is shifting its focus from real estate to healthcare and plans to "fast track" its presence and growth in the sector through acquisitions.
To finance these acquisitions, the company has entered into development agreements with prominent real estate developers such as Brigade Enterprises Ltd and Casagrand Premier Builder Ltd. for monetising its legacy realty assets. PVP expects to generate Rs 2,000 crore in cash flows from these developments in the next six years.
“This transaction represents a significant step in our journey in creating a powerful house of brands in healthcare services focused on Tier 2 and Tier 3 markets in key identified specialisations,” said Gaurav Davda, head of M&A and strategy at PVP Ventures.
Meanwhile, 7Med was started by Vikas Verma, Mayank Sharma and Rakesh Thakur over a decade ago. Verma previously worked at medtech company Fresenius and later B. Braun’s India unit. Sharma also served at Fresenius in the past.
7Med raised capital in 2017 from nephrologist Sudhanshu Tyagi, who worked with medical technology company B. Braun in Europe. Tyagi, through his privately held entity, owned a 30% stake in 7Med while the three co-founders held 23.3% each, according to VCCEdge data as of FY23.
The company initially created and provided dialysis services within other hospitals. A few years ago it opened Epitome Hospital in Delhi specialising in nephrology, urology, pulmonology and critical care.
7Med operates a network of 22 facilities, including shop-in-shop dialysis centres within major hospitals and standalone dialysis centres across six states, as well as four super-speciality hospitals.
As per PVP’s stock exchange filing, 7Med has generated an EBITDA of about Rs 10 crore so far in the current financial year. It is expected to deliver an EBITDA of Rs 50 crore in the next four years with the capital infusion, PVP said.